#Corporate

Software vs. IT services companies

Mrz 18, 2021 - 5 min read
Louis-Maxime Negre, Chief People Officer at Sopra Banking Software

Confusion between software publishers and IT services companies is extremely common in our industry. And yet, differentiating between them is key. Close ties have obviously been formed between the two types of company over time, and it is not uncommon now for an IT services company to become a software publisher. However, despite similarities, the way of working and the resulting daily tasks are fundamentally different depending on which field you are in as it evolves.

IT services companies, for example, favor a customer-centric approach; namely, collaborating closely with clients to develop a coherent response to their initial request. Of course, their offering is based on being able to develop specific solutions, but also on integrating pre-existing products. The scope of activity for the most versatile players ranges from the support of consulting services upstream of computer programming to managing hosting and infrastructure. In contrast, software publishers, such as Sopra Banking Software, are focused more on developing and selling proprietary products and responding to market challenges. Their implementation involves the delivery of “package” software to different clients, equipped with customization capabilities in order to meet the expectations of each client.

However, the positioning of software publishers is more complex since it needs to address the largest players in the market to be able to build a dedicated solution, based on software or components, guaranteeing accelerated implementation, and scalability over time. Furthermore, the trend of being able to offer varying solution models where the product is obscured with preference given to the service is now fast accelerating. In markets such as banking or financial services, the publisher must choose between partnering with other professionals or gradually transforming itself into a software publisher/provider.

In this respect, publishers who have maintained the ability to integrate, implement and manage services associated with their in-house products (instead of relying exclusively on networks of integration partners, such as IT services companies) are therefore ahead of the game. The future lies in this versatility possessed by software publishers who are able to integrate and manage their products themselves, while continuing to join forces with integration partners for more complex or larger-scale programs. Despite the differences, both activities remain essential. IT services companies in particular allow software publishers to stay connected to one another. They also help customers to integrate new software with their existing systems, while maintaining services once the integration step is complete. This co-dependency is not new and will increase in the coming years. Both types of activity will need to explore other ways of working together to provide seamless integration, through operational models that can be delivered quickly and meet customer demands in full.